FERS supplement and claiming social security

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PoppyA
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Joined: Sat Oct 11, 2014 4:24 pm

FERS supplement and claiming social security

Post by PoppyA »

Correct me if I am wrong but if a FERS retiree hits 62 years of age, the FERS supplement stops as the employee is now eligible for social security correct?

What are the pro’s & cons of filing for social security at 62?

The FERS employees spouse is effected by the windfall elimination and receives a drastically reduced social security monthly allotment. Theoretically the spouse could file on the FERS employees earnings for an increased social security payment.

Thank you.
Big Mig
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Joined: Wed Oct 15, 2014 9:43 am

Re: FERS supplement and claiming social security

Post by Big Mig »

PoppyA wrote: Mon Sep 13, 2021 10:21 am Correct me if I am wrong but if a FERS retiree hits 62 years of age, the FERS supplement stops as the employee is now eligible for social security correct?
Yes. I turned 62 in June, and the pension check I received on July 1 was the last to include the FERS supplement (a small surprise; I thought it would stop a month earlier—maybe FERS is paid in arrears).
What are the pro’s & cons of filing for social security at 62?
Pretty much the same as they are for anyone; many social security threads here to read…
The FERS employees spouse is effected by the windfall elimination and receives a drastically reduced social security monthly allotment. Theoretically the spouse could file on the FERS employees earnings for an increased social security payment.
…many of which will point out that, though there may be generally applicable rules of thumb, specific circumstances matter. The effects of the WEP and GPO are important but we can’t really tell you how they affect your decision without a lot more detail. Except to suggest that you factor them into your calculations.

In our case, my wife is a teacher and will have a pension from a state where she didn’t pay into SS. But most of her career was in states where she did pay SS, so most of her eventual pension income will be irrelevant to the WEP/GPO. I don’t plan to take SS until I turn 70…but our decision might be much different if she had a pension based on 30 years of non-SS employment.
stan1
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Joined: Mon Oct 08, 2007 4:35 pm

Re: FERS supplement and claiming social security

Post by stan1 »

There are several factors:
- Need for the SS income immediately (because there are no other funds to pay for ongoing expenses)
- Your personal life expectancy (not an actuarial table). In general if you expect to live a long time there is benefit to deferring SS up to age 70. If you expect to pass away within 10-15 years you'd want to claim sooner.
- Spousal benefits, if applicable, can add complexity and become situational
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pahkcah
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Re: FERS supplement and claiming social security

Post by pahkcah »

"The FERS employees spouse is effected by the windfall elimination and receives a drastically reduced social security monthly allotment. Theoretically the spouse could file on the FERS employees earnings for an increased social security payment."

The amount of monthly SS payment the spouse receives would be based on the Windfall Elimination Provision (WEP) chart found at the bottom of this page: https://www.ssa.gov/benefits/retirement ... r/wep.html. The WEP reduction is limited to one-half of spouse's pension from non-covered employment. Without any real numbers, not sure if spouse's reduction would be "drastically reduced."

Believe any claim against your SS would be subject to the GPO rule that would reduce your spouse's SS payment by 2/3 of spouse's non-covered pension. I believe this is true when the FERS retiree predeceases the spouse. I assume it's the same when applying against a living spouse's SS, but stand ready to be corrected.

DW and I are both Federal retirees. Both impacted by WEP. DW's monthly SS payment is reduced by $428 per month, mine by $413. We will never be able to claim against each other's SS benefit due to GPO reductions.

Many threads dealing with when to claim SS benefits. Here's one that's pretty active right now: viewtopic.php?p=6224026#p6224026
Tub84
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Re: FERS supplement and claiming social security

Post by Tub84 »

I thought the Windfall Elimination Provision (WEP) only applies to federal employees retiring under the older CSRS system and not the current FERS system? (FERS employees pay social security; CSRS employees do/did not)
tj
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Re: FERS supplement and claiming social security

Post by tj »

Tub84 wrote: Tue Sep 14, 2021 6:42 am I thought the Windfall Elimination Provision (WEP) only applies to federal employees retiring under the older CSRS system and not the current FERS system? (FERS employees pay social security; CSRS employees do/did not)
You thought correctly.
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pahkcah
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Re: FERS supplement and claiming social security

Post by pahkcah »

tj wrote: Tue Sep 14, 2021 8:46 am
Tub84 wrote: Tue Sep 14, 2021 6:42 am I thought the Windfall Elimination Provision (WEP) only applies to federal employees retiring under the older CSRS system and not the current FERS system? (FERS employees pay social security; CSRS employees do/did not)
You thought correctly.
The WEP applies to any non-covered pension*. Based on the OP's statement, "The FERS employees spouse is effected by the windfall elimination and receives a drastically reduced social security monthly allotment," I believed the OP was stating that the spouse had a non-covered pension. If this is the case, the spouse is subject to the WEP unless the spouse paid Social Security taxes on 30 years of substantial earnings while working other jobs. If this is not the case, the spouse would not be subject to the WEP or the GPO.

*A pension based on work performed for a federal, state, or local government, a nonprofit organization, or in another country and you did not pay Social Security taxes.
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